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Fool Tech Panel: Is This Week's Rally Overdone?

Based in part on Intel's rosy earnings, the market's up, but is the rally overdone?

After weeks of anxiety from Wall Street, Intel(NASDAQ:INTC) helped lead off earnings season with a boom. Intel's earnings were music to investor's ears and were widely seen as the catalyst for a rally that led technology stocks through the roof -- the Nasdaq shot up 3.5% the following day.

Yet, even after more lukewarm earnings from Google(NASDAQ:GOOG) and Nokia(NYSE:NOK), technology stocks have hung onto their hard-earned gains, with the Nasdaq up more than 7% from last week's close. Confidence is on the rise after the week's events, but is it warranted?

With this in mind, we asked our Foolish tech experts Anders Bylund, Tim Beyers, and Rick Munarriz about their insights on the week's rally and which stocks look attractively valued going forward:

Question: Was the technology rally following Intel's earnings report overdone?

Tim: Now's a good time to be cautious. There just aren't enough signs that a full-scale tech recovery is underway. Nervous investors might even consider taking some profits.

Don't get me wrong; I'm as bullish as ever about the prospects for my tech portfolio. But Intel's report lacked revenue growth and Dell(NASDAQ:DELL) says tech spending is likely to remain weak for the foreseeable future. Show me deep-pocketed CIOs ready to spend and I'll get excited.

Rick: I hate to be a wet blanket, but I wasn't exactly breaking out the high fives after Intel's report.

You earned about $600 million less than last year after normalizing income and you generated $1.4 billion less in revenue than last year. What do you want, a cookie?

Who cares if analysts expected a crummier report? That is so mid-March. Tech stocks have already led the market rally for months. If you want to lead, do it by heading in the right direction. I'll confess to liking the sequential improvement at Intel, but wake me up when Intel shows year-over-year growth again.

Anders: Call me crazy, but I think Mr. Market is finally getting his timing right. Intel's strong earnings come from surprisingly eager consumer spending, not from clearing out old inventories or some one-time accounting trick. I still think that the real bounce lies ahead, as these quarter-over-quarter improvements still can't measure up to last year's pre-calamity numbers, which would make this the perfect time to put your cash hoard to work.

Question: Based on the week's events, is there a stock that you're more bullish on long-term?

Tim: Google is hard to resist after last night's earnings report. Yes, I know growth is slowing, but have you seen the other earnings reports? Tech revenue is down, way down in most cases, yet Google is still a grower. And it's defending well against tough new competitors such as Microsoft's (NASDAQ:MSFT)Bing.

We don't really know what's to come of newer projects such as Wave and the Chrome OS, but we do know that The Big G produced more free cash flow this year than it did during last year's second quarter, thanks to cost cuts. Does anyone do innovation on a budget better? I can't think of anyone.

Rick: Between Intel and Google posting better than expected earnings and IBM(NYSE:IBM) raising its guidance, I think it's safe to approach the computing stocks that are growing in this environment.

I like Hewlett-Packard(NYSE:HPQ) here. Unlike Intel or rival Dell -- that are projected to post lower earnings this year -- HP is taking baby steps forward. CEO Mark Hurd is a genius, and those are hard to come by these days.

Anders: The market is still full of amazing deals, even after the last three months' general recovery. But with all due respect to Google, Intel, and IBM, none can match the value I see in Nokia right now. The world-leading mobile technologist remains massively profitable in the darkest of times, and the stock deserves so much more than a paltry P/E multiple around 12. The ticket to long-term riches goes through Finland today.

Now that you've heard from us Fools, tell us how you feel. Drop a line in the comments box below and tells us if this week left you more confident, or if you're still staying cautiously on the sidelines.